Sveaas at Røkke’s throat after ‘dirty’ Solstad restructuring – threatens legal action

There is an unusually harsh attack from billionaire and owner of Kistefos Christine Sveis on Thursday morning. To put it mildly, he is dissatisfied with the restructuring of outsourcing company Solstad Offshore, which announced last fall that Kjell-Inge Rökes Aker would bring in several billion kroner in new capital and thus strengthen its hold on the company.

Sveaas is now threatening legal action, and believes Aker has “enriched” himself at the expense of other shareholders in the company.

– This is one of the wildest transactions we have seen on the Oslo Stock Exchange. The restructuring plan is blatantly discriminatory to shareholders and enriches Aker at the expense of the shareholder community, Sveaas says in a press release.

– It is a shame for Oslo Borsels and Norway as an investment nation that a dominant player like Aker is allowed to discriminate against and abuse his fellow shareholders. He adds: “We do not understand why Solstad’s board allowed itself to be misled by Aker into abusing shareholders through such a dirty deal.”

Kestevos is now calling for an extraordinary general meeting to be held in Solstad, where shareholders will be asked to decide whether a compensation claim should be brought against the board.

It is believed that the company is being depleted of billions

Sveaas’ dilution comes a month and a half after Solstad announced a sweeping restructuring plan after lengthy talks with creditors. The rescue plan includes major changes to the group, with the formation of a new parent company that will receive $4 billion in new capital.

This deposit comes in the form of cash, but also one of the most advanced ships in the industry, the Norman Maximus, which is valued at 1 billion kroner. Aker-controlled AMSC owns the ship, and Aker itself gets NOK 2.25 billion from the issue of the remaining three billion. This company takes most of the fleet to Solstad. After the restructuring, Aker will own at least 41 percent and AMSC 18 percent.

Kestevos reacts strongly to the fact that Aker, which currently owns 22.9 percent of Solstad, is taking a disproportionately large share of the new capital. Kiestevos owns 15% of Solstad.

“The plan involves a direct transfer of assets and control to Aker, while Solstad Offshore will be exploited for NOK 4-6 billion. If you take into account future profits and increases in the value of the fleet, over time this is likely to reach up to NOK 10 billion.” .

Aker: There is no connection

There was no contact between Aker and Kistefos after the plan was announced at the end of October, Aker’s communications director Atle Kigen says to DN Thursday morning.

“We don’t recognize ourselves at all in the Kestivus show,” he adds in the afternoon.

After Thursday, there will also be a response from Solstad.

Solstad CEO Lars Peder Solstad says the Kistefos recall is full of factual errors, and he is not intimidated by Sveaas’ threats of legal action, which he believes are “baseless.” For his part, Chairman of the Board of Directors Harald Espedal says that the development of the course shows that Sves is wrong.

A few hours after Kestevos’ announcement, Solstad Offshore confirmed in a separate announcement to the stock exchange that they had received a letter in which Kestevos requested a general meeting to determine whether a compensation case should be brought against a number of parties. The notice states that the Board of Directors is obliged to call a general meeting. The date will be communicated separately and the board will return with its view on the matter, the company wrote.

DN has attempted to contact Oslo Börs about the criticism, but has not yet received a response.

– Breach of integrity and ethics

Sveaas also wrote in the press release that the plan represents a “violation of integrity and ethics and a clear violation of normal market practices.”

– Those responsible for the plan should replace this. Kestevos wants to find a solution that treats all shareholders equally, something the current board has proven conclusively that they do not do, says Sves.

Kestevos envisions that the potential compensation claim will be directed against those responsible for the restructuring plan, who Kestevos believes are members of the board and managing director of Solstad Offshore, and the chairman and managing directors of Aker Capital and AMSC, respectively.

Kystevos emphasizes that these parties will not be eligible to vote, and also recommends the establishment of a board of directors. Kistefos encourages all other shareholders to grant Kistefos power of attorney at the general meeting.

– Serious violation

In the controversial restructuring plan, 35 of Solstad Offshore’s 43 ships are proposed to be transferred to an unlisted company, Solstad Maritime. These 35 ships are “the same tenderloin” in Solstad’s offshore fleet, writes Kestevus.

Kestevos points out that equal treatment means that other shareholders can subscribe to 77.1 percent of the $4 billion issue, not 13.6 percent, or $750 million, as is the case now.

In addition, Aker gives itself the right to elect all members of the Board of Directors of Solstad Maritime, thus assuming full control of what is today the largest asset of Solstad Offshore. The deal deprives all shareholders other than Aker of their rights and at least four to six billion Norwegian kroner in underlying values. In addition, other shareholders are also deprived of future earnings and upside potential, continues Kestevos.

Old acquaintance is muddy

– Aker will triple its stake and upside potential at the expense of Solstad Offshore and its other shareholders. We consider this a serious violation of the duty of management and the Board of Directors to properly manage Solstad’s values, look after all the interests of the company and treat shareholders equally, says CEO Bengt A. Rim in Kestivos.

Bengt Rem knows a lot about how Røkke and Aker conducted transactions over the years.

Rehm was Aker’s CFO in the spring of 2009 when Roque got into a public argument with then-Industry Minister Silvia Brostad over the sale of companies from Aker to Aker Solutions. Critics believe that Aker sold the companies, which had significant financing commitments, at too high a cost to Aker Solutions. Since Røkke’s stake in Aker was much higher than in Aker Solutions, Røkke benefited from the state-related transaction, which was on the ownership side of Aker Solutions.

Rehm, a trained accountant, joined Aker in 1995. He was already the CFO during the company’s 2003 rescue, and a central figure in that process. He joined court broker Kjell Inge Røkke Arctic Securities in 2009 and has worked at Arthur Andersen and at Oslo Børs.

Did not receive an explanation

According to Kestevos, Solstad’s debt restructuring plan was drawn up without the participation or notification of other shareholders.

-We have received no explanation as to why Aker chose to refinance the debt in the back room, rather than talk to other shareholders. Kestevos and other major contributors have repeatedly come forward to contribute to refinancing solutions, but have been flatly rejected. There are many better solutions, which also include resolving the conflict surrounding the Norman Maximus. To our knowledge, the board has made no attempts to do so, says Reem.

– We have also received no explanation as to why all shareholders of Solstad Offshore were not invited to subscribe for equivalent shares in Solstad Maritime as they now have shares in Solstad Offshore. In our opinion, there are no circumstances that could justify such a transfer of value and differential treatment. Reem says it was not difficult to structure the issue in a way that treated shareholders equally.(conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using links that lead directly to our pages. No copying or other use of all or part of the Content may be permitted except with written permission or as permitted by law. For more terms see here.